BCE (TSX:BCE) stock’s dividend has had a loud year. After years of steady increases, the company cut the annualized common dividend to $1.75 per share from $3.99, effective with the second-quarter (Q2) 2025 dividend. That change reduced the quarterly payment from $0.9975 to $0.4375, and BCE stock has kept that new level since then. Management framed the cut as a reset to defend the balance sheet and rebuild free cash flow while interest costs rose and network spending stayed heavy. So, what should investors consider now?
Into BCE
BCE stock is Bell, the telecom giant many Canadians rely on for wireless, internet, and business connectivity, with media assets inside Bell Media. Telecoms can feel boring, but demand stays sticky because households treat connectivity like a utility. The trade-off is constant investment in fibre and network upgrades, which can squeeze cash flow when rates climb. That push and pull sits behind the dividend drama, and it shapes what the stock can do from here.
The stock has tried to steady itself while investors digest the new payout and the company’s spending plans. Over the past year, it has moved inside a wide band, with shares up just 3% after jumping up and down like a yo-yo. In late January 2026, it traded around the mid-$30s, which suggests the panic phase has eased, but investors still want proof that cash generation can stay consistent through 2026.
Under the hood, BCE stock faced a tougher operating backdrop in Canada. In Q3 2025, Bell CTS added 26,111 net new retail high-speed Internet subscribers, down 38.4% from the prior year. Management pointed to aggressive promotional offers by competitors and less new fibre footprint expansion. BCE stock also said slowing industry growth reflected lower immigration and slower housing starts, which matters because fewer new households means fewer easy new connections.
Into earnings
Earnings show why the dividend cut did not come out of nowhere, but also show BCE stock still has real earning power. In Q3 2025, BCE delivered 1.3% consolidated revenue growth and 1.5% higher adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) year over year. Adjusted net earnings increased 6.5% to $733 million, and adjusted earnings per share (EPS) rose 5.3% to $0.79. Free cash flow increased 20.6% to $1.003 billion, while cash flows from operating activities rose to $1.914 billion.
The headline net income number looks dramatic, and it deserves context. BCE stock reported net earnings attributable to common shareholders of $4.502 billion in Q3 2025, and it said the year-over-year swing reflected higher gains on investments tied to the sale of its minority stake in Maple Leaf Sports and Entertainment and lower impairment of assets, mainly in Bell Media. That is why forward-looking cash flow matters more than headline profit.
For the near-term outlook, BCE stock confirmed 2025 guidance that targets revenue growth of 0% to 2%, adjusted EBITDA growth of 0% to 2%, capital intensity of about 15%, and free cash flow growth of 6% to 11%. It also warned that adjusted EPS is still expected to fall year over year, with the updated range showing a decline of 13% to 10%. The plan is simple on paper: spend less, protect margins, and let cash flow catch up to the new dividend level.
Bottom line
That alls aid, valuation looks tempting, but you need to read it properly. BCE stock currently offers a trailing price-to-earnings ratio (P/E) of about 5.11 and a forward P/E around 12.59. This hints at why the headline multiple can mislead after one-time gains. The forward dividend remains $1.75, or roughly a 5.14% yield at recent prices. And that can still create a lot even from a $7,000 investment.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| BCE | $34.45 | 203 | $1.75 | $355.25 | Quarterly | $6,993.35 |
BCE stock can be a buy now, even with a lower dividend, if you want steady TFSA income and you can tolerate slow growth, heavy capital needs, and policy noise. The reset makes the payout easier to fund and beats nostalgia for old dividends today. If you buy, size it modestly, watch cash flow each quarter, and treat upside as a bonus, not a promise.
